Official figures released on November 13, 2025, revealed a sobering portrait of the UK economy: growth slowed to just 0.1% in the third quarter of the year, a significant drop from the 0.3% increase seen in the previous quarter and well below the 0.2% predicted by analysts. This near standstill has been widely attributed to a massive cyberattack on Jaguar Land Rover (JLR), the country’s largest automaker, which forced the company to halt production for five weeks starting August 31, 2025. The effects of this disruption rippled across the entire auto industry and beyond, casting a long shadow over the government’s economic ambitions ahead of a crucial budget announcement later this month.
According to the Office for National Statistics (ONS), the cyberattack on JLR had a “marked” impact, with September 2025 seeing UK car production plunge by 28.6%—the sharpest monthly fall since the darkest days of the coronavirus pandemic in April 2020. The ONS also reported that overall industrial output fell by 2% during the same month. The consequences were not limited to the auto sector: the broader economy actually shrank by 0.1% in September, coinciding with what analysts have described as a 70-year low for UK car production.
The timing of these figures could hardly be worse for Prime Minister Keir Starmer and Chancellor Rachel Reeves, who face mounting pressure as they prepare to unveil the government’s budget on November 26. Reeves has repeatedly made growth her top priority, but the latest data has forced her to acknowledge the scale of the challenge. “There’s more to do to build an economy that works for working people,” Reeves said in response to the ONS report, as quoted by BBC News. She pledged that her upcoming budget would focus on “fair decisions to build a strong economy that helps us to continue to cut waiting lists, cut the national debt and cut the cost of living.”
The cyberattack on JLR, described by Treasury chief Rachel Reeves as “the biggest cyberattack that this country has ever experienced,” led to the shutdown of production not only at JLR’s own facilities but also among its suppliers. With more than 30,000 employees directly affected and tens of thousands more jobs supported through the supply chain, the five-week halt sent shockwaves through the manufacturing sector. Production only resumed in October, but by then the damage to third-quarter growth had already been done. As AP reported, “The shutdown rippled through the U.K. auto industry.”
Manufacturing as a whole suffered, with output declining by 0.5% over the quarter. The only bright spots came from the services sector—which grew by 0.2%—and construction, which edged up by 0.1%, buoyed in part by demand for private housing repairs. However, these gains were not enough to offset the pain elsewhere. Consumer spending growth remained weak, and economists warn that this could continue to weigh on the economy for the rest of 2025.
The slowdown in growth has also increased speculation that the Bank of England may move up plans for an interest rate cut, possibly as soon as December. As MT Newswires noted, “Investors are increasingly betting that softer growth and a rising jobless rate will nudge the Bank of England toward cutting rates early next year—though some now see a move possible as soon as December.” UK bond yields have already started to fall, and the pound is under pressure as markets await further signals from the central bank.
Adding to the government’s woes, unemployment has risen to 5%, the highest level in four years, according to data released earlier in the week. This uptick has placed further strain on public finances and social services, complicating the government’s efforts to balance fiscal responsibility with the need to support vulnerable households. The Labour government, which has been in office for just over a year and a half, now finds itself languishing in the opinion polls, with Starmer’s favorability ratings deeply negative.
Rachel Reeves has provided clear hints that tax increases are coming in the budget, including a possible rise in the basic rate of income tax—the first such move by a British government in half a century. This would break a key manifesto pledge but, according to Reeves, is necessary to reduce debt, tackle hospital waiting lists, and bring down inflation. As she put it, “At my Budget later this month, I will take the fair decisions to build a strong economy.”
Not everyone is convinced by the government’s approach. Shadow chancellor Mel Stride, representing the Conservative opposition, claimed that Starmer and Reeves were “in office but not in power,” asserting that the prime minister had “stripped the chancellor of responsibility for the Budget.” Opposition politicians have placed much of the blame for the current malaise on last year’s budget, which raised National Insurance contributions for employers and increased the national living wage—measures, they argue, that have increased costs for businesses and stifled growth.
Business leaders are feeling the pinch. Allan Jones, managing director of TC Morris, a pie manufacturer in Dudley, West Midlands, told BBC News that his company’s costs had increased by £200,000 this year. “I think there’s a level at which people are prepared to pay for a pork pie. So we’ve managed to pass on some increases, but we’ve had to absorb quite a bit,” Jones said. He expressed hope that the forthcoming budget would bring relief in the form of lower taxes, reduced energy costs, and more government support for investment.
Liz McKeown, director of economic statistics at the ONS, summarized the situation: “There was a particularly marked fall in car production in September, reflecting the impact of a cyber incident, as well as a decline in the often-erratic pharmaceutical industry. Services were the main contributor to growth in the latest quarter, with business rental and leasing, live events and retail performing well, partially offset by falls in R&D and hair and beauty salons.”
Looking ahead, economists remain cautious. Ruth Gregory, deputy chief UK economist at Capital Economics, warned that even without the drag from the JLR cyberattack, “the economy is struggling to gain decent momentum.” She predicted that tax rises in the upcoming budget could trim GDP by around 0.2% in 2026, leaving little reason to expect a significant acceleration in growth.
James Smith, research director at the Resolution Foundation, put it bluntly: “The next challenge will be to ensure that the upcoming budget supports rather than hinders growth—no mean feat given the scale of fiscal consolidation that is expected.”
As policymakers prepare for the November 26 budget, they face a daunting task: restoring confidence, stimulating growth, and protecting jobs in an increasingly uncertain economic climate. The road ahead looks bumpy, and all eyes will be on the government’s next move.
